Scottrade was a stockbrokerage firm that operated both online and at

branches A branch, sometimes called a ramus in botany, is a woody structural member connected to the central trunk of a tree (or sometimes a shrub). Large branches are known as boughs and small branches are known as twigs. The term ''twig'' usually r ...

. In 2017, the company was acquired by

TD Ameritrade TD Ameritrade is a stockbroker that offers an electronic trading platform for the trade of financial assets including common stocks, preferred stocks, futures contracts, exchange-traded funds, forex, options, mutual funds, fixed income investmen ...

and

Toronto-Dominion Bank Toronto-Dominion Bank (french: links=no, Banque Toronto-Dominion), doing business as TD Bank Group (french: links=no, Groupe Banque TD), is a Canadian multinational banking and financial services corporation headquartered in Toronto, Ontario. T ...

History

In 1980, Rodger O. Riney founded Scottsdale Securities as a retail stockbroker in

Scottsdale, Arizona , settlement_type = City , named_for = Winfield Scott , image_skyline = , image_seal = Seal of Scottsdale (Arizona).svg , image_blank_emblem = City of Scottsdale Script Logo.svg , nick ...

. In 1981, Riney moved to

St. Louis St. Louis () is the second-largest city in Missouri, United States. It sits near the confluence of the Mississippi and the Missouri Rivers. In 2020, the city proper had a population of 301,578, while the bi-state metropolitan area, which e ...

and opened a second branch. In 1985, the company moved its headquarters to

. By 1989, the company had 6 branches, and by 1991, the company had 15 branches. In 1996, the company launched its

website A website (also written as a web site) is a collection of web pages and related content that is identified by a common domain name and published on at least one web server. Examples of notable websites are Google, Facebook, Amazon, and Wi ...

and

electronic trading platform In finance, an electronic trading platform also known as an online trading platform, is a computer software program that can be used to place orders for financial products over a network with a financial intermediary. Various financial products ...

. The number of trades increased by 15% per month, compounded monthly, for 39 months. By 2000, more than 90% of the company's trades were initiated online. The name of the company was changed to Scottrade because the domain Scottrade.com was available. For 2 years after the

dot-com bubble The dot-com bubble (dot-com boom, tech bubble, or the Internet bubble) was a stock market bubble in the late 1990s, a period of massive growth in the use and adoption of the Internet. Between 1995 and its peak in March 2000, the Nasdaq Compo ...

burst in 2000, revenue declined, although it fully recovered by 2004. The company began offering Chinese-language services in its retail locations in 2001 and in 2003 made its online offerings available in Chinese. Between 2000 and 2004, the company doubled the number of retail branch locations, reaching 211 in 2004. By 2003, 98% of trades executed by the company were made online. In 2004, Scottrade bought an office building outside of St. Louis next to its call center to use as its corporate offices. In 2006, Scottrade purchased the naming rights for the stadium of the

St. Louis Blues The St. Louis Blues are a professional ice hockey team based in St. Louis. The Blues compete in the National Hockey League (NHL) as a member of the Central Division in the Western Conference. The franchise was founded in 1967 as one of the ...

, which was renamed the Scottrade Center (now the Enterprise Center). The Scottrade Center naming rights was negotiated and managed by Scottrade CMO Chris Moloney which was cited by the American Business Journals as "possibly the fastest naming rights negotiation ever." In 2008, the company launched Scottrade Bank. The St. Louis Business Journal said Scottrade had experienced "rapid growth" with aggressive online marketing. Nielson rated Scottrade as the #1 online advertiser in 2008 by media weight. In 2009, the company launched a

mobile app A mobile application or app is a computer program or software application designed to run on a mobile device such as a phone, tablet, or watch. Mobile applications often stand in contrast to desktop applications which are designed to run on d ...

. In September 2017, the online brokerage division of the company was acquired by

and the banking division was acquired by

Controversies

Misrepresentations

In 2008, the

U.S. Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...

(SEC) charged the company with making fraudulent misrepresentations to clients about Nasdaq pre-open orders in violation of the Securities Exchange Act of 1934. The company consented to the entry of an Order by the SEC that included a censure of Scottrade. The company also agreed to stop committing or causing any violations of the act, and paid a civil penalty of $950,000.

Violations of record-keeping requirements

In January 2014, the company admitted to violating the record keeping requirements of federal security laws. The U.S. Securities and Exchange Commission submitted a request for data describing its trades as part of an investigation into whether an account had been hacked and unauthorized trades made for a customer. Every brokerage firm is required to keep trading records under the law. The company was missing data over a six-year period. As part of the settlement, the company agreed to admit fault and pay a fine of $2.5 million.

Database hack

In October 2015, Scottrade revealed that, in late 2013 and early 2014,

hacker A hacker is a person skilled in information technology who uses their technical knowledge to achieve a goal or overcome an obstacle, within a computerized system by non-standard means. Though the term ''hacker'' has become associated in popu ...

s accessed an encrypted database containing the personal records of more than 4.6 million clients, including names, street addresses, email addresses, social security numbers, and other sensitive account data. The company became aware of the breach when it was approached by Federal authorities who were investigating similar thefts at other financial service companies. As a precaution, Scottrade offered identity protection services to all affected customers. In November 2015, after performing its own investigation of the breach, the

Financial Industry Regulatory Authority The Financial Industry Regulatory Authority (FINRA) is a private American corporation that acts as a self-regulatory organization (SRO) that regulates member brokerage firms and exchange markets. FINRA is the successor to the National Associat ...

fined Scottrade $2.6 million for failing to store financial records and emails completely and securely and for failing to have an organized process for doing so. The company had deleted and failed to save over 168 million outgoing emails with trading information. Scottrade did not admit to or deny these charges, but consented to an entry of FINRA's findings and agreed to pay the fine.

References

{{Online brokerages Toronto-Dominion Bank American companies established in 1980 Financial services companies established in 1980 Financial services companies disestablished in 2017 2017 mergers and acquisitions Online brokerages